In L.A., Down is Up!
- Apr 20, 2011
Coming off the last couple of years of recession, real estate is slowly finding its way to an escalating trajectory and sometimes the centers of the sector’s revival are found in the most unpredictable places. This is definitely the case with Los Angeles, where probably the most interesting of these situations has formed. While some would have believed downtown L.A. is not an appealing setting for business, with several firms declaring they’ve been keeping the area off their map, they’re probably rethinking that notion.
Recent news indicates downtown is on the upswing, and a series of deals will confirm its position as a new developer haven. This forecast is fueled by a series of firms that are closing deals in the area, making the prime office market downtown’s specialty. Vacancy rates have dropped by 1 point to 15 percent, compared to the fourth quarter of 2010. Since then, it has absorbed 323,407 square feet by retaining major tenants and attracting new ones.
This unprecedented boost in interest is fueled by recent talks for a new pro football stadium and entertainment center that will occupy a section of the current L.A. Convention Center site. And sports is not the only focus—plans for an art museum are also moving forward in the vicinity of the Walt Disney Concert Hall.
The buzz around downtown is creating something of a gravitational pull toward the area, and, according to their own representatives, quoted by the Los Angeles Business Journal, firms such as Pircher Nichols & Meeks and Seyfarth Shaw are enjoying very attractive deals with downtown. Seyfarth Shaw had already been part of the L.A. legal scene for some time when the prospect of setting up an office in downtown to cater to new employees living in communities closer to the area came up. When doing some reconaissance work in the downtown area, Raymond Kepner, one of the two managing partners at the firm, said he found a new vibrant environment there, very attractive for employees for both work and residence.
Other high-profile deals include Haight Brown & Bonesteel L.L.P.’s 10-year sublease of 27,000 square feet and major projects for the downtown area such as the approved high-rise redevelopment of the Wilshire Grand.
With recent projects such as L.A. Live creating huge future opportunities and compensating for less fortunate ventures such as mayor Antonio Villaraigosa’s initiative for the clean tech corridor in South Downtown, the area reflects a balance of realism regarding the market’s downturn. But as hundreds of thousands of square feet of prime office space are handed out at very attractive rates, it only makes sense that downtown is rapidly creating its own identity, one that will encompass every aspect of a re-emerging real estate market that might prove the lifeline L.A. needs to stay on top.